Cross Supplier Agreement - Mikohn Gaming Corp. and Shuffle Master Inc.
CROSS SUPPLIER AGREEMENT
This Agreement is entered into as of this 28th day of December, 1999
("Effective Date"), by and between MIKOHN GAMING CORPORATION ("MIKN"), a Nevada
corporation, and SHUFFLE MASTER, INC. ("SHFL"), a Minnesota corporation.
W I T N E S S E T H:
WHEREAS, MIKN has need for certain products manufactured and/or
distributed by SHFL and SHFL has need for certain products manufactured and/or
distributed by MIKN; and
WHEREAS, SHFL desires to sell certain products to MIKN which MIKN
desires to purchase on the terms and conditions set forth in this Agreement; and
WHEREAS, MIKN desires to sell certain products to SHFL which SHFL
desires to purchase on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants and conditions
set forth herein and other good and valuable consideration, the sufficiency and
adequacy of which are hereby acknowledged by all parties, it is agreed as
follows:
1 DEFINITIONS.
For purposes of this Agreement, the terms set forth below shall be
defined as follows:
1.1 "Affiliate" shall mean a parent, subsidiary or other entity owned
or controlled by MIKN or SHFL as the case may be.
1.2 "Buyer" means the party buying Products from the Supplier.
1.3 "Confidential Information" shall have the meaning ascribed in
Section 13 below.
1.4 "Effective Date" shall have the meaning ascribed in the first
paragraph of this Agreement.
1.5 "Games" shall mean live casino table card games.
1.6 "Limited Warranty" shall have the meaning ascribed in Section 10
below.
1.7 "MIKN Product" means a Product manufactured and/or distributed by
MIKN.
1.8 "Notice of Dispute" shall have the meaning ascribed in Section
17.2.1.
1.9 "Notice to Arbitrate" shall have the meaning ascribed in Section
17.2.2.
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1.10 "Preferred Supplier" means a Supplier that is Buyer's supplier of
first choice. Buyer shall, in good faith, give the Preferred Supplier the first
opportunity to meet Buyer's requirements, which may be dictated by customer
requirements.
1.11 "Product" means a MIKN Product or a SHFL Product or both.
1.12 "Purchase Order" shall have the meaning ascribed in Section 6
below.
1.13 "Purchase Price" shall have the meaning ascribed in Section 3.1
below.
1.14 "SHFL Product" means a Product manufactured and/or distributed by
SHFL.
1.15 "Supplier" means the party selling Products to the Buyer.
1.16 "Term" shall have the meaning ascribed in Section 4 below.
1.17 "Territory" means North America.
2 THE PRODUCTS.
2.1 MIKN shall be the exclusive Supplier to SHFL of the following MIKN
Products in the Territory: progressive controllers and progressive displays for
Games. The foregoing notwithstanding, if SHFL requires progressive controllers
or progressive displays which MIKN cannot supply, after giving MIKN the right of
first refusal to supply the desired Product to SHFL's specifications at a
competitive price, SHFL may purchase such Products elsewhere or manufacture them
itself. SHFL shall cooperate with MIKN in providing appropriate licenses of
SHFL's intellectual property on reasonable terms in the event any such
intellectual property is required by MIKN to meet SHFL's requirements.
2.2 MIKN shall be the non-exclusive but Preferred Supplier to SHFL of
the following MIKN Products worldwide: progressive controllers and progressive
displays for Games, signs, slot glass and electronics.
2.3 SHFL shall be the exclusive Supplier to MIKN of the following SHFL
Products in the Territory: automatic card shuffling machines. The foregoing
notwithstanding, if MIKN requires shufflers with built in card reading
capability or other capabilities which SHFL cannot supply, after giving SHFL the
right of first refusal to supply the desired Product to MIKN's specifications at
a competitive price, MIKN may purchase such shufflers elsewhere or manufacture
them itself. MIKN shall cooperate with SHFL in providing appropriate licenses of
MIKN's intellectual property on reasonable terms in the event any such
intellectual property is required by SHFL to meet MIKN's requirements.
2.4 Subject to existing distribution agreements, SHFL shall be the
non-exclusive but Preferred Supplier to MIKN of the following SHFL Products
worldwide: automatic card
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shuffling machines, coin sensors/acceptors and associated equipment for Games.
2.5 This Agreement creates no license, express or implied, to any
intellectual property of the parties.
3 PRICING; MOST FAVORED NATION.
3.1 All prices for Products shall be the lowest price in the Territory
charged by the Supplier to any customer or distributor of Supplier ("Purchase
Price").
3.2 If, after the Effective Date of this Agreement, the Supplier grants
to any third party, other than an Affiliate of Supplier, a price which is more
favorable to the third party than the price provided to Buyer, then Buyer shall
be entitled to the more favorable price. Such new price shall be effective as of
the effective date of the lower price given to the third party.
4 TERM AND TERMINATION.
This Agreement shall commence on the Effective Date, shall remain in
effect for a period of five (5) years and shall renew automatically for periods
of one (1) year (the "Term") unless terminated by either party giving written
notice at least 90 days prior to the expiration of the Term.
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5.1
[XXXX] TEXT DELETED CONFIDENTIAL TREATMENT REQUESTED
5.2
[XXXX] TEXT DELETED CONFIDENTIAL TREATMENT REQUESTED
6 ORDERING PROTOCOL.
Buyer may order Products from Supplier by submitting to Supplier a
written purchase order which specifies the Products to be purchased, the price
for each such Product and the total amount due to Supplier for such order (the
"Purchase Order"). Purchase Orders may be submitted by facsimile. An order from
Buyer shall be considered to be accepted by Supplier when the Purchase Order has
been signed by an authorized officer or representative of Supplier and Supplier
has provided Buyer with written notification that such order has been accepted.
All sales of Products to Buyer shall be subject to the provisions of this
Agreement. Additional or different provisions on any Purchase Order or other
business forms submitted by Buyer to Supplier shall have no force or effect
regardless of whether Supplier accepts and/or fills orders submitted by Buyer on
such forms.
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7 PAYMENT TERMS.
The Purchase Price for all Products purchased shall be paid 50% with
the order and the balance paid within thirty (30) days after delivery. All sums
not paid when due shall bear interest at the rate of 1% per month (12% per
annum) until paid in full.
8 TAXES, DUTIES AND FREIGHT.
Buyer shall pay all taxes, duties and any other fees or assessments
which may be assessed or imposed on the Products by any federal, state or local
governmental authority as a result of the purchase or sale of such Products by
Buyer. Buyer shall pay directly or reimburse Supplier for all freight and
shipping charges.
9 FAIR REPRESENTATION; GOOD QUALITY.
9.1 Buyer shall always demonstrate and represent the Products fairly
and shall make no false or misleading representations to customers or other
persons with regard to the Products of Supplier.
9.2 Supplier shall furnish only good quality Products which are
manufactured, tested, packaged and shipped in accordance with industry
standards.
9.3 Supplier shall furnish to Buyer details of technical
specifications, features and functions of all Products generally made available
to end-users of the Products. Buyer shall be responsible for obtaining from
Supplier all sales literature, catalogs, information on Products and parts,
specification sheets, instructions and procedures necessary to furnish the
proper assistance to its customers.
10 LIMITED WARRANTY; INFRINGEMENT INDEMNITY.
10.1 Supplier will keep Buyer informed of Supplier's warranty or
warranties applicable to the Products as may be in effect from time to time, and
will extend the appropriate warranty to each end-user who purchases a Product
from Buyer (the "Limited Warranty"). Buyer agrees to furnish a copy of the
Limited Warranty to the end-user upon delivery of the Product.
10.2 Supplier makes no warranties or representations as to performance
of Products or as to service to Buyer except as set forth in Supplier's Limited
Warranty accompanying the Products. Upon reasonable notice, Supplier reserves
the right to change the warranty and service policy set forth in such Limited
Warranty. The Limited Warranty accompanying the Products is in lieu of all other
warranties, express or implied, including, but not limited to, warranties of
merchantability or fitness for a particular purpose. No affirmation of fact,
including, but not limited to, statements regarding suitability for use or
performance of the Product shall be deemed to be a warranty of Supplier for any
purpose. The liability of Supplier, if any, for damages relating to allegedly
defective Products shall, under any legal or equitable theory, be limited to
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the actual price paid by the end-user for such Products. In no event shall
Supplier be liable for direct, indirect, special, or consequential damages,
including without limitation loss of profits, arising out of any breach of this
agreement.
10.3 Any other provision in this Agreement or any Limited Warranty
accompanying the Products to the contrary notwithstanding, the Limited Warranty
does not cover the following:
10.3.1 repair or replacement of Products damaged by accidents,
tampering, transportation, neglect, misuse, mishandling, alterations which may
include, without limitation, any deviation from circuit design, installation or
removal of features, or any other modification (unless approved by Supplier in
advance and in writing);
10.3.2 repair or replacement of Products damaged from unusual
physical or electrical stress or use of the Products for purposes other than
those for which they were designed; or
10.3.3 repair or replacement of Products damaged from rain,
wind, hail, lightning, storms, floods, fires, earthquakes or other acts of God,
vandalism or civil unrest.
10.4 MIKN will defend and indemnify SHFL against third party claims of
infringement by MIKN Products. SHFL will defend and indemnify MIKN against third
party claims of infringement by SHFL Products.
11 TRADEMARKS AND TRADE NAMES.
All uses by Buyer in its advertising or elsewhere of Supplier's name or
any trademark of Supplier (or any mark or name closely resembling such names(s))
now or hereafter owned or licensed by Supplier shall be subject to the prior
written consent of Supplier. Buyer shall not acquire any proprietary right,
title, or interest in or to any such trademark(s) or trade name(s). Buyer shall
not change, remove, obliterate, delete from, add to or otherwise alter any
logos, trademark(s) and/or trade names(s) affixed to the Products, and shall not
add any additional designation, without the prior written consent of Supplier.
12 PROPRIETARY RIGHTS.
12.1 All Supplier software programs, designs, inventions and product
manuals are the exclusive property of Supplier. No part of any Supplier design,
product manual or software program (including without limitation any compression
technology contained in any software program) may be copied, reproduced,
transmitted, stored in a retrieval system, or translated into any foreign
language, without the prior written permission of Supplier.
12.2 Supplier reserves all rights to the look, feel, and design or its
products. Any attempt to copy, reproduce, modify, encrypt, decompile, reverse
engineer or otherwise attempt to interpret existing code or engineering concepts
or designs of any Supplier Product without the
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prior written consent of Supplier is strictly prohibited.
13 NON-DISCLOSURE.
MIKN and SHFL each hereby acknowledges that as a result of the
relationships established by this Agreement, each of them may have access to or
may become aware of trade secrets, processes and/or confidential, non-public
information regarding the other party (hereinafter "Confidential Information")
and that such confidential Information is a valuable and unique asset of such
party. MIKN and SHFL each hereby agrees to treat all Confidential Information
with the same degree of care with which it treats its own confidential
information, and not to disclose, in whole or in part, any Confidential
Information to any other person, firm, corporation, association or other entity
unless required by law or regulation or order of a court of competent
jurisdiction. MIKN and SHFL each also agree not to use the Confidential
Information of the other except as permitted under this Agreement.
14 RELATIONSHIP OF PARTIES.
The relationship between MIKN and SHFL is that of independent
contractors. Neither party, nor its agents and employees, shall under any
circumstances be deemed an agent or representative of the other and neither
shall have authority to act for and/or bind the other in any way, or represent
that it is in any way responsible for acts of the other. This Agreement does not
establish a joint venture, agency or partnership between the parties.
15 COMPLIANCE WITH LAWS.
Each party undertakes to the other not to violate any law or regulation
including, without limitation, any gaming law or regulation or to engage in any
act or omission which tends to bring discredit upon the gaming industry or
otherwise jeopardizes the other party's ability to engage in the legal gaming
business.
16 TERMINATION.
16.1 Supplier may terminate and/or cancel this Agreement without
further liability or obligation to Buyer if:
16.1.1 Buyer is in default of any provision hereof requiring
Buyer to pay money to Supplier and such default is not cured with ten (10) days
after Supplier gives Buyer written notice thereof;
16.1.2 Buyer is in default of any material provision hereof
(other than the non-payment of money) and such default is not cured within
thirty (30) days after Supplier gives Buyer written notice thereof; or
16.1.3 Buyer becomes insolvent or seeks protection,
voluntarily or involuntarily,
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under any bankruptcy law.
16.2 Supplier may terminate this Agreement if it appears in the
reasonable judgment of Supplier that, due to the relationship between Buyer and
Supplier created by this Agreement, Supplier may be subjected to significant
disciplinary action or lose or become unable to obtain or reinstate any federal,
state and/or foreign registration, license or approval material to Supplier's
business or the business of any Affiliate of Supplier.
16.3 All remedies provided in this Agreement are cumulative and not
exclusive and may be exercised in conjunction with any other remedies a party
may have in law or equity.
16.4 Sections 5, 10 and 13 shall survive the termination of this
Agreement.
17 GENERAL PROVISIONS.
17.1 Notice. Any notice, request, demand, or other communication that
is required or permitted under this Agreement shall be deemed properly given if
it is deposited in the U.S. mail, certified, return receipt requested, postage
prepaid, properly addressed as follows:
17.1.1 If to MIKN:
Mikohn Gaming Corporation
1045 Palms Airport Drive
Las Vegas, Nevada 89119
Attention: President
With a copy to:
Mikohn Gaming Corporation
1045 Palms Airport Drive
Las Vegas, Nevada 89119
Attention: General Counsel
17.1.2 If to SHFL:
Shuffle Master, Inc.
1106 Palms Airport Drive
Las Vegas, Nevada 89119
Attention: President
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With a copy to:
Shuffle Master, Inc.
1106 Palms Airport Drive
Las Vegas, Nevada 89119
Attention: General Counsel
17.2 Dispute Resolution. Any disputes that may arise under or
concerning this Agreement, including but not limited to any dispute concerning
the enforceability or interpretation of any provision herein, shall be resolved
as follows:
17.2.1 If a dispute arises under this Agreement, any party may
give written notice to the other that it desires to meet in person to attempt to
resolve the dispute ("Notice of Dispute"). Within thirty (30) days after service
of a Notice of Dispute, appropriate representatives of the parties shall meet in
person and attempt in good faith to resolve the dispute.
17.2.2 If the parties fail to reach a resolution of a dispute
within thirty (30) days after service of the Notice of Dispute, either party may
request arbitration. Such request shall be in writing, served on the other party
in accordance with the provisions of Section 13.1 and shall designate an
arbitrator ("Notice to Arbitrate").
17.2.3 If the parties fail to reach a resolution of a dispute
after meeting and conferring as required under Section 17.2.1, either party may
request arbitration. Such request ("Notice to Arbitrate") shall be in writing,
served on the other party in accordance with the provisions of Section 17.1 and
shall designate an arbitrator.
17.2.4 The Notice to Arbitrate must set forth verbatim all of
the provisions of this Section 17.2 or it shall not be deemed effective.
17.2.5 Within ten (10) days after receipt of the Notice to
Arbitrate, the receiving party shall designate a second arbitrator. If a second
arbitrator is not timely designated, the dispute shall be submitted to the first
arbitrator for resolution. Within 10 days after the appointment of the second
arbitrator, the two arbitrators shall select a third arbitrator. If the two
arbitrators cannot agree on a third arbitrator, either party may commence
proceedings before the American Arbitration Association to appoint the third
arbitrator. Upon the appointment of the third arbitrator, the arbitration panel
shall be deemed duly constituted.
17.2.6 Once a panel of arbitrators is constituted, the panel
shall be required to render a final decision resolving the dispute within 60
days.
17.2.7 The arbitration panel shall be required to award the
prevailing party its costs and attorneys fees.
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17.3 Governing Law. This Agreement shall be governed by the and
construed in accordance with the substantive law of the state of Nevada, without
giving effect to any conflicts or choice of laws principles that otherwise might
be applicable.
17.4 Forum Designation. Any action brought by either party against the
other party for claims arising out of this Agreement shall be brought in a court
of competent jurisdiction in the State of Nevada.
17.5 Divisibility. If any provision of this Agreement is found to be
prohibited by law and invalid, or for any other reason if any provision is held
to be unenforceable, in whole or in part, such provision shall be ineffective to
the extent of the prohibition or unenforceability without invalidating or having
any other adverse effect upon any other provision of this Agreement.
17.6 Entire Agreement. This Agreement, including the documents and the
instruments referred to herein and attached hereto, constitutes the entire
agreement between the parties relating to its subject matter and supersedes all
prior or contemporaneous negotiations or agreements, whether oral or written,
relating to the subject matter hereof. No extension, modification or amendment
of this Agreement shall be binding upon a party unless such extension,
modification or amendment is set forth in a written instrument, which is
executed and delivered on behalf of such party.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, including the Exhibits attached hereto and incorporated herein by
reference, as of the date first written above.
SHUFFLE MASTER, INC. MIKOHN GAMING CORPORATION
By: /s/ Mark L. Yoseloff By: /s/ Charles H. McCrea, Jr.
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Its: Exec. V. Pres. Its: Ex. V.P. & Secretary
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